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FG to Propose N9.78trn Budget for 2020 – Zainab Ahmed

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  • FG to Propose N9.78trn Budget for 2020 – Zainab Ahmed

The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said the Federal Government plans to spend around N9.78 trillion in the 2020 fiscal year.

Ahmed disclosed this while unveiling the draft 2020-2022 Medium Term Fiscal Framework and Fiscal Strategy Paper in Abuja on Tuesday.

According to her, the 2020 budget would be forecast based on a more realistic oil production level of 2.18 million barrels per day and lower oil benchmark of $55 per barrel.

This projection was $5 lower than the $60 benchmark of 2019 and 120,000 barrels per day below the 2.3 million barrels per day predicted in 2019 budget.

The minister said, “Oil production volume is projected at average 2.18mbpd for 2020. Although this is lower than the projected oil production volume of 2.3mbps for 2019, we believe that this is a more realistic projection. For 2021 and 2022, the projections are 2.22mbpd and 2.36mbps, respectively.”

The Organisation of Petroleum Exporting Countries, the International Energy Association and the United States Energy Information Administration had projected that non-OPEC members would increase oil production by at least two million barrel in 2019 and even produce more in 2020.

She explained that the adjustment was in anticipation of future global oil glut, “a lower oil price benchmark of $55 per barrel is assumed considering the expected oil glut in 2020 as well as the need to cushion against unexpected price shock.”

Breaking down the expenditure, the minister said N526.45 billion would go to statutory transfer in 2020, up from N502.05 billion in 2019.

While debt servicing and recurrent expenditure (non-debt) would gulp N2.45 trillion and N4.7 trillion, respectively. Again more than the N2.14 trillion and N4.38 trillion budgeted in the current year.

Capital expenditure, however, would drop by N1.13 trillion to N2.05 trillion in 2020, down from N3.18 trillion budgeted in 2019.

Speaking on funding, the minister said N7.6 trillion would be raised from non-oil and oil sources.

Another N300 billion is expected to come from special levies while according to the minister, stamp duty and exchange rate differentials should add at least N200 billion and N125.48 billion, respectively.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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Economy

NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021

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The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.

This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.

It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.

NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.

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Economy

Nigeria’s Food Inflation Hits 22.95 Percent in March 2021

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Food inflation in Africa’s largest economy Nigeria rose by 22.95 percent in March 2021, the latest report from the National Bureau of Statistics (NBS) has shown.

Food Index increased at a faster pace when compared to 21.70 percent filed in February 2021.

Increases were recorded in Bread and cereals, Potatoes, yam and other tubers, Meat, Vegetable, Fish, Oils and fats and fruits.

On a monthly basis, the food sub-index grew by 1.90 percent in March 2021. An increase of 0.01 percent points from 1.89 percent recorded in February 2021.

Analysing a more stable inflation trend, the twelve-month ended March 2021, showed the food index averaged 17.93 percent in the last twelve months, representing an increase of 0.68 percent when compared to 17.25 percent recorded in February 2021.

Insecurities amid wide foreign exchange rates and several other bottlenecks that impeded free inflow of imported goods were responsible for the surged in prices of goods and services in March, according to the report.

The Central Bank of Nigeria-led monetary policy committee had attributed the increase in prices to scarcity created by the intermittent clash between herdsmen and farmers across the nation.

However, other factors like unclear economic policies, increased in electricity tariffs, duties, subsidy removal and weak fiscal buffer to moderate the negative effect of COVID-19 on the economy continue to weigh and drag on new investment and expansion of local production despite the Federal Government aggressive call for improvement in domestic production.

Nigeria’s headline inflation rose by 18.17 percent year-on-year in the month under review.

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